NMLS Practice Exam #5 Questions and
Answers Graded A+
The purpose of the S.A.F.E. Act is to:
- Protect consumers by ensuring that the mortgage lending industry operates
without unfair and deceptive practices
- Provide the opportunity for credit to all creditworthy applicants
- Provide information about closing costs to the consumer
- Protect consumers by creating privacy provisions for mortgage lenders - Correct
answer-Protect consumers by ensuring that the mortgage lending industry operates
without unfair and deceptive practices
Marketing campaigns for the solicitation of credit are covered by the provisions of:
- GLB
- TILA
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,- RESPA
- ECOA - Correct answer-TILA
Which of the following inquiries is considered lawful when asked for the purposes
of credit approval as governed by ECOA?
- Years on the job
- Race
- Marital status
- Age - Correct answer-Years on the job
The Telemarketing Sales Rule prohibits calls:
- Made to a customer after 8:00 a.m. or before 9:00 p.m.
- Made to consumers who have specifically asked a mortgage professional not to
contact them
- To consumers not listed on the Do-Not-Call Registry
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,- To customers who established a business relationship within the last 12 months -
Correct answer-Made to consumers who have specifically asked a mortgage
professional not to contact them
In most cases, a mortgage loan requires monthly payments. All of the following
loan types require monthly payments, except:
- HECMs
- ARMs
- Fixed-rate loans
- HELOCs - Correct answer-HECMs
The first step in the closing process is:
- Rescission
- Funding
- Application
- Steering - Correct answer-Funding
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, An underwriter would expect to see _____ in order to document the income of a
commissioned borrower.
- Two years' tax returns if the borrower's commissions represent 20% of his/her
income
- 1099s from the previous year
- Profit and loss statement and two years' tax returns
- Two years' tax returns and all schedules if the commission income is more than
25% of income - Correct answer-Two years' tax returns and all schedules if the
commission income is more than 25% of income
Which of the following is considered a loan primarily for personal, family, or
household use that is secured by a mortgage or deed of trust?
- Nontraditional mortgage product
- Residential mortgage loan
- Commercial mortgage loan
- Residential real estate - Correct answer-Residential mortgage loan
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
Answers Graded A+
The purpose of the S.A.F.E. Act is to:
- Protect consumers by ensuring that the mortgage lending industry operates
without unfair and deceptive practices
- Provide the opportunity for credit to all creditworthy applicants
- Provide information about closing costs to the consumer
- Protect consumers by creating privacy provisions for mortgage lenders - Correct
answer-Protect consumers by ensuring that the mortgage lending industry operates
without unfair and deceptive practices
Marketing campaigns for the solicitation of credit are covered by the provisions of:
- GLB
- TILA
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,- RESPA
- ECOA - Correct answer-TILA
Which of the following inquiries is considered lawful when asked for the purposes
of credit approval as governed by ECOA?
- Years on the job
- Race
- Marital status
- Age - Correct answer-Years on the job
The Telemarketing Sales Rule prohibits calls:
- Made to a customer after 8:00 a.m. or before 9:00 p.m.
- Made to consumers who have specifically asked a mortgage professional not to
contact them
- To consumers not listed on the Do-Not-Call Registry
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,- To customers who established a business relationship within the last 12 months -
Correct answer-Made to consumers who have specifically asked a mortgage
professional not to contact them
In most cases, a mortgage loan requires monthly payments. All of the following
loan types require monthly payments, except:
- HECMs
- ARMs
- Fixed-rate loans
- HELOCs - Correct answer-HECMs
The first step in the closing process is:
- Rescission
- Funding
- Application
- Steering - Correct answer-Funding
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, An underwriter would expect to see _____ in order to document the income of a
commissioned borrower.
- Two years' tax returns if the borrower's commissions represent 20% of his/her
income
- 1099s from the previous year
- Profit and loss statement and two years' tax returns
- Two years' tax returns and all schedules if the commission income is more than
25% of income - Correct answer-Two years' tax returns and all schedules if the
commission income is more than 25% of income
Which of the following is considered a loan primarily for personal, family, or
household use that is secured by a mortgage or deed of trust?
- Nontraditional mortgage product
- Residential mortgage loan
- Commercial mortgage loan
- Residential real estate - Correct answer-Residential mortgage loan
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
